Fidelity Investments Advisor 401(k) business, a 401(k) platform that is sold by advisors to small and mid-sized businesses in which Fidelity provides a robust basket of services, grew 16% in 2005, to $13.5 billion in record-kept assets, up from $11.6 billion at the end of 2004. By the end of 2005 there were 2176 Fidelity Advisor 401(k) plans, including 380 new plans added in 2005.
With the Fidelity Advisor 401(k), Fidelity acts as record-keeper, administrator, trustee, and provides communications materials for advisors to use from initial meetings to presentation to the plan’s sponsor, through enrollment, and on an ongoing basis with participants.
At a time when many companies cannot–or will not–make the contributions necessary to keep defined benefit (DB) plans going, and Social Security coverage for many Boomers looks questionable at best, defined contribution plans like 401(k)s are becoming a mainstay for retirement assets as well as an important perq for many companies that want to do what they can to attract the best employees they can get, and provide a way for executives–and employees–to save for retirement.
The whole retirement issue is reaching the proportions of a “perfect storm,” says Dave Liebrock, executive VP of Fidelity Investments Institutional Services Company. “Sponsors are looking for help and guidance from an independent advisor.” Of 250,000 small to mid-sized companies in the U.S. that offer 401(k)s, Fidelity estimates that 15,000 of those reviewed their plan in the last year. Of those Liebrock estimates that “7,500 went on to look for an advisor.”